Expanision of Medicare Home Health Entitlement

Written By: Jason Shafrin
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Oct•
24•12

Healthcare spending in the U.S. has been rising by 6.6%per year between 1990 and 2010. Over this same time period, however, home health spending increased by 9.0% per year. Do rising home health cost represent an increase in access to needed care or a costly expansion of heallth care benefits? Or, is this just a statistical trick where real costs remain unchanged but home health care has transformed from an unpriced service provided by friends and relatives to a service provided by professionals and thus can be priced.

Regardless, a recent court ruling indicates that home health cost will continue to increase. The New York Times reports:

In a proposed settlement of a nationwide class-action lawsuit, the administration has agreed to scrap a decades-old practice that required many beneficiaries to show a likelihood of medical or functional improvement before Medicare would pay for skilled nursing and therapy services.

Under the agreement, which amounts to a significant change in Medicare coverage rules, Medicare will pay for such services if they are needed to “maintain the patient’s current condition or prevent or slow further deterioration,” regardless of whether the patient’s condition is expected to improve.

Federal officials agreed to rewrite the Medicare manual to make clear that Medicare coverage of nursing and therapy services “does not turn on the presence or absence of an individual’s potential for improvement,” but is based on the beneficiary’s need for skilled care.